Performance Appraisal

Formal system of review and evaluation of individual or team task performance

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Types of Performance Information

Behavior-based: focuses on specific behaviors related to job success.
Verbal communication skills for sales personnel. Timeliness of responses.

Results-based: focuses on employees accomplishments

Sales made during rating period. Reduction of grievances

Conflicting Roles for Performance Appraisal

Figure 113

Basic Concepts in Performance Management and Appraisal

Comparing Performance Appraisal and Performance Management

Performance Appraisal:
Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance.

Performance Management:
An integrated approach to ensuring that an employees performance supports and contributes to the organizations strategic aims.

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Performance Appraisal Process

Identify Specific Performance Appraisal Goals
Establish Performance Criteria (Standards) and Communicate Them To Employees

Examine Work Performed Appraise the Results Discuss Appraisal with Employee

Who Conducts Appraisals

Supervisors Subordinates Team members who rate each other Outside sources( clien Employees self-appraisal Multisource (360 feedback) appraisal

Graphic Rating Scales

(Category Ratings)

Graphic Rating Scales - performance is rated along a Likert scale.

Makes Sound Decision:

1
Poor

Below Average Average Above Average Outstanding

Problem: What does outstanding mean?

Terms Defining Standards on One Company

Figure 112

Cons: Use of same format in every dept. may include ratings on factors quite irrelevant to his or her job profile
Use of double negatives leads to confusion e.g. never goes beyond the time limits and come on time

Example: Graphic Rating Scale (Cleanup) Childs Name: Date: Circle One: Indoors/outside (playground) Rate child on each of the following by marking appropriate spot on line next to each numbered phrase. Always* Often* Occasionally** Seldom*** Never 1. blocks efforts to clean up __|______|________|_________|_______|__ 2. does not stop playing unless teacher (T) requests firmly __|______|________|_________|_______|__ 3. does not participate __|______|________|_________|_______|__ 4. cleans up only with T supervision__|______|________|_________|_______|__ 5. cleans up w/o T supervision __|______|________|_________|_______|__

*Often: at least four times for period observed **Occasionally: two or three times for period observed ***Seldom: only one time for period observed

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Critical Incident Method

record of highly favorable and unfavorable employee actions. Observes and records the subordinates effective and ineffective behaviors throughout the appraisal period

Critical Incident Method

(Narrative )

Critical Incident Date__________ Name________________________ Location & Time_________________________________ ___________________________ Description of Incident________________________ _____________________________________ _____________________________________ ______________________ Corrective Action_______________________

Pros: Provides factual records for subsequent discussions and decision making For developmental purpose, discussion about the corrective actions No recency effect Cons: Time involved in documenting employee actions Impossible to catch all employee actions no quantification is done No compensation

Alternative Ranking method

Listing of all employees from highest to lowest in performance Drawbacks:

Does not show size of differences in performance between employees Implies that lowest-ranked employees are unsatisfactory performers. Becomes a difficult process if the group to be ranked is large.

Forced Distribution
Performance appraisal method in which ratings of employees are distributed along a bell-shaped curve Drawbacks: Assumes a normal distribution of performance. Creates team equities (high and low performing teams) Organization with w good selection process Is not readily applicable to small groups of employees.

Forced Distribution on a Bell-Shaped Curve

Figure 119

Paired Comparison method

No. of comparisons = N(N-1)/2 Where N is no. of employees to be compared

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Annual Confidential report method

by immediate supervisor

for promotion and transfer purpose

Generally maintained in Govt. Departments Four point grade: Excellent, good, fair, poor High secrecy

Cons:
Not data based Impressionistic No feedback is given to the ratee Greater stress is given on evaluation rather development

Management by Objectives
Concept given by Peter F. Drucker,1954 Introduced in 1970 in India by Madura Coats

Specifying the performance goals that an individual and his or her manager agree to try to attain within an appropriate length of time.

Steps in MBO
Set the organizational goals Set the departmental goals Discuss departmental goals with all the subordinates and ask them to develop their individual goals Define the expected results (Dept. head and their subordinates set short term perfo. Targets) Performance reviews: measure the results, compare with the expected results Provide feedback via periodic meetings

Pros: Performance based method of appraisal Enhances superior-subordinate relationships

Improve communication between them

High top management commitment Increased individual commitment

Cons: Difficult to compare the level of performance of different employees Setting objectives jointly with subordinates (tug of war)

Emphasis on target may neglect the other interpersonal trait measurement

No emphasis on employees development Time consuming method

Behaviorally Anchored Rating Scales (BARS)

Step 1. Collect critical incidents (effective and ineffective behaviors related to job dimension) Step 2. Identify the job/performance dimension (Inventory control, also called anchors) Step 3. Reclassification of critical incidents (developing various level of performances) Step 4. Assigning scale values to the incidents (1 to 7 or 1 to 9 depending upon how well it represents the performance dimension, called vertical point scales) Step 5. Producing the final instrument (BARS instrument)

Pros:
Accurate Clear standards: the critical incidents along with the scales help to clarify what is very good, good and poor performance Automatic feedback through critical incidents

 Problems:
Expensive. Time consuming and requires considerable effort Must be customized to each job. Cumbersome in firms with numerous positions.

360 degree feedback

Obtaining feedback from the manager's key contacts. These would normally include: o The manager him/herself o Subordinates (employees who work for the manager) o Peers (fellow managers) o Managers (senior management) o Customers o Suppliers

Pros:
more acceptable feedback to the employee A good tool to enhance customer service and quality of service Multiple inputs to the individual More participative Facilitates employees to compare self appraisal with others perception Less biased method

Cons:
Consume a lot of time (raters, designing questionnaires, data analysis) Source of confusion (Conflicting opinions)

Requires a lot of training in implementing the process

Costly process

Self Appraisal
Development is self-directed Identifying their own developmental needs Can record his own success and failures while performing different functions Helps in preparing his own developmental plans Cons: Usually rate higher than they are rated by supervisors More biased

Problems in Performance Appraisal

Halo/horn error Leniency/strictness Central tendency Recent behavior bias Personal bias Contrast effect Manipulating the evaluation Similar to me/dissimilar to me Constant error

The Appraisal Interview

Scheduling interview Interview structure (discuss the performance) Use of praise and criticism Employees role Concluding interview (mutually agreed action plan )

The Appraisal Interview

SatisfactoryPromotable

SatisfactoryNot Promotable

Types of Appraisal Interviews

UnsatisfactoryCorrectable

UnsatisfactoryUncorrectable

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The Appraisal Interview (contd)

Guidelines for Conducting an Interview

Talk in terms of objective work data

Dont get personal.

Encourage the person to talk.

Action Plan

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